Frequently Asked Questions About Installment Loans
Does Wise offer loans?
Yes, we do. Wise Loan offers the following type of loans:
- Online installment loans
- Bad credit loans
- Same-day loans
- Quick cash loans
- Emergency loans
How do installment loans work?
You apply for an installment loan and the lender offers you terms. Terms include how much you can borrow, how long you can borrow it for, and the interest rate you will pay. These terms vary depending on factors such as your credit history, income and current debt load as well as the type of loan you’re applying for.
Once you accept a loan, the money is transferred to you or used to make a purchase, such as with an auto loan. You then begin to pay the loan back as agreed. Installment loans may be broken into monthly, biweekly or weekly payments.
Read our blog post to learn more about how installment loans work.
What do you need to get an installment loan?
Typically, you’ll want to make sure that you have the following items handy when applying for an installment loan:
- Some form of government-issued ID
- Your most recent bank statement
- A personal check and/or debit card
- Verifiable income
- A checking account owned by the applicant
- Direct deposit
However, Wise Loan doesn’t generally require this information for our online application process, but we may ask for further verification if we notice anything suspicious.
Where can I get an installment loan online?
You can get an installment loan online via any number of lenders and banks. However, it’s important to ensure you’re applying for a loan with a responsible lender. Consider applying for a loan with Wise Loan today.
How many installment loans can you have?
There’s no rule about how many installment loans someone can have, though many lenders will only give you one loan at a time to minimize their own risks. Typically, how much you can borrow or how many loans you can have are determined by factors such as your credit history, income and current debt. Most lenders won’t loan you money you likely don’t have the income to pay back, so if you’re already carrying a lot of debt, you may be less likely to get a loan.
How can I repay my installment loan?
How you repay your installment loan depends on the terms of the loan. Common methods include making a payment from your bank account via an online portal, mailing in a check or having payments automatically deducted from your checking or savings account.
Can installment loans be paid off early?
You can almost always pay an installment loan off early. In some cases, you may experience interest cost savings from doing so, though that depends on how the loan is structured.
What are examples of installment loans?
Perhaps the most commonly-held type of installment loan is a car loan. While (with car loans) the money borrowed tends to go directly to the seller, it’s still a set amount borrowed all at once and payed back in (usually equal and monthly) installments.
Can you get installment loans with bad credit?
Yes, it is possible to get an installment loan if you have bad or no credit. Wise Loan doesn’t require good credit to approve someone for loan products, for example. Your credit score may impact what loans are available to you and how much interest you pay for those loans, depending on the lenders you work with.
To learn more about how to get approved for an installment loan with bad credit, read our blog post.
How do installment loans affect credit score?
If the lender reports to the credit bureaus, installment loans can impact your credit score positively or negatively depending on other factors. Primarily, the long-term impact comes from whether or not you pay your installment loan as agreed. Paying your bills on time is a positive for your credit score. Missing payments, paying late or defaulting on an installment loan are all major negative hits for your credit score.
How do installment loans help you rebuild your credit score?
Installment loans can help you rebuild your credit score if the lender reports to the credit bureaus and you make all payments on time. That creates some positive reporting for your credit, which can help boost your score. These types of loans can also improve your credit mix, especially if all you have otherwise is revolving credit accounts such as credit cards. A good credit mix can be a positive factor for your credit score.
Does Wise Loan report to the credit bureaus?
Yes, Wise Loan reports to two of the three major credit bureaus. Since your credit history and score is different with each of the major bureaus, having positive payment information sent to them can be a good benefit for your credit.
How can I get instant funding for my loan?
If you have a qualified debit card associated with your checking account, apply, and are approved for your Wise Loan by 5:30 pm CT, you can get instant funding. With instant funding, you can receive funds from the loan the same day the loan is approved. However, how fast you receive funds depends on your financial institution’s processes.
What's the difference between an installment loan and revolving credit?
An installment loan provides a lump sum of money immediately. You then pay that amount back, plus interest, over time as agreed. By contrast, revolving credit is a line of credit such as a credit card. You draw on the credit limit, borrowing as much as you need at a time and paying it back. With revolving credit, you can keep using the same credit repeatedly if you pay it back.
How are installment loans and payday loans different?
Installment loans are paid back over time via monthly, biweekly or weekly payments. Depending on the terms of an installment loan, you may pay it back over the course of a few months. This allows the payments to be broken down into manageable chunks within a budget. Most of our customers are set up to pay us back within 6 months of borrowing. If you are outside of Texas, we may offer the ability to pay back over the course of one year.
In contrast, a payday loan is extremely short-term. You borrow against your next paycheck or two, meaning that you’ll need to pay the loan back within a few weeks. In some cases, the payday loan payment takes a big chunk of your future paycheck, leaving you in a financial bind again.
What happens if I don't repay my installment loan on time?
If you miss installment loan payments, the lender will likely report that fact to the credit bureaus. Late payments are a negative factor for your credit score, and the later you are, the worse the hit. So, if you don’t repay your installment loan on time, you could experience a lower credit score.
If you default on the loan — which means you don’t make your payments for a few months — the lender may send you to collections or start collections activity. That can include legal action against you. If the lender wins a lawsuit against you, they may be able to get a judgment to garnish your wages or bank accounts for the payments.
To learn more about what happens if you don’t pay an installment loan, read our blog post.
Where Can I Get the Best Installment Loan?
One of the best ways to get an installment loan is to apply for a direct loan from a lender. A direct lender issues your loan agreement without going through a third party, such as a broker or agent. The primary advantage of direct lenders is that they usually offer the lowest interest rates because there are fewer costs involved in arranging and processing loan requests.
Borrowers have various options for obtaining a direct loan. You can sometimes get a direct loan through your bank, which will likely offer attractive interest rates. However, many banks don’t provide small-dollar personal loans and often have stringent credit score criteria, which could be an issue if you only need a relatively small amount of money or don’t have a high credit rating.
Some credit unions also extend installment loans, but you’ll need to be a member in good standing to access this type of credit. Like banks, credit unions generally only extend credit to borrowers with solid credit scores, and you may struggle to obtain a small-dollar, personal installment loan from a credit union.
Your final option is to apply for an installment loan with an online lender. An online lender could be a suitable option for you if you’re working to rebuild a lower credit rating by making regular monthly payments, as a wide range of companies will consider applicants who can’t get an installment loan from their bank or credit union. Many online companies also let you pre-qualify for a loan based on your credit history, enabling you to see the products you’re likely eligible for without affecting your credit score. You can often get installment loan funding from Wise Loan without good credit, and many prospective borrowers receive a decision within a few minutes.
